Government expands fast-track merger process: What it means
Big update from the Ministry of Corporate Affairs: as of September 4, 2024, the government has widened the fast-track merger process under the Companies Act.
Now, certain unlisted companies that meet prescribed thresholds, such as borrowings below ₹200 crore and no defaults, and their holding or subsidiary firms can merge or demerge more quickly—no need to wait around for lengthy approvals.
(Heads up: listed companies still don't qualify.)
What's new?
Previously, only small companies and wholly owned subsidiaries could use this shortcut.
With these changes, unlisted firms with borrowings under ₹200 crore—and no loan defaults—can now skip National Company Law Tribunal (NCLT) approval too.
The rules also cover cross-border deals like reverse flipping (when a foreign parent merges into its Indian arm).
This all lines up with Finance Minister Nirmala Sitharaman's push in the 2025-26 budget to make doing business simpler and boost growth.